CMS Posts Administrator's Ruling That Creates $75 and $100 Tiers for COVID testing

On Thursday, October 15, CMS announced it would drop the price of COVID high throughput testing from $100 to $75, at the same time, that it will implement a performance bonus of $25 per test for a 48 hour turnaround.

See yesterday's posting here.  Seema Verma had flagged the changed in a September speech, without this level of detail.

Today, Friday, CMS released the actual 10-page legal document supporting the policy change.  It's Ruling 2020-1-R2.  See it here:

https://www.cms.gov/files/document/cms-ruling-2020-1-r2.pdf

On the same day, October 16, WSJ ran a story on rapid mass testing by Broad Institute for numerous New England colleges.  The WSJ says that some labs provide COVID testing on a 4 day timeline for $100, while Broad provides testing in 18 hours for $25.   (That assumes coordinated mass testing programs in place, though, it's not one-off retail testing of any patient.)

On October, Reps. Sherrill, DelBene, Sewell introduced the "SPEEDY COVID-19 Tests Act" with payment tiers of +25% over CMS for <24 hours, standard pay to 48 hrs, and no pay after 72 hours. Here, here.

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Collection to "Completed Test"

CMS clearly refers to a two calendar day turnaround from the time of specimen collection to the time of "completing the test."  I had a few calls from labs hoping the 48 hours was going to be from the time of lab receipt, not patient test.

Completed Test Means: Ready to Release

CMS defines a "completed test" as one that is complete and the report is "ready to be released."  Sounds like that has to occur by 11:59 pm on the third calendar day (e.g. Monday to Wednesday). 

Two Calendar Days

The policy refers both to "two calendar days" (not 48 hours).  I suspect a test taken at 8 am Monday and returned Wednesday is two calendar days, whether 8 am or 8 pm on Wednesday (but that's just a hunch).  I'm assuming that "two calendar days" does not mean a test taken Monday and reported Tuesday, which I would call "one calendar day."  

Don't Mess With Us and Wait Five Days by Batching

CMS strongly defends its reasoning in the Administrator's R2 ruling.  It notes that it priced  high throughput tests at $100, assuming they required high resources for fast turnaround.  CMS comments that some labs may have taken advantage of  the agency, and use economical limited resources and batching to produce tests at long delays of 3-6 days.  Continue doing that, and pay a financial penalty, says CMS.

Don't Just Push Part B to Front of Queue

CMS provides a rational for the "majority of cases in previous month" clause - a 51% rule - because it doesn't want labs to merely push Medicare Part B cases to the front of a queue and delay everyone else.  

Where is U0005?

In transmittal R1 last spring, CMS announced inside the Administrator's Transmittal the text of the new rapid codes U0003, U0004.  This new transmittal R2 does not seem to show us the text of the new code U0005, the $25 add-on payment.

Medicare FFS 

The program for $25 add-on payments applies only to Medicare fee for service.  Over a third of Medicare patients are in Medicare Advantage, half of patients in a few states.

Hospital Outpatient and ER

Normally, since about 2014, CMS has "bundled" or not paid separately most lab tests in the hospital outpatient and E.R. settings, including clinical chemistry and microbiology.  (Human genetic testing is paid separately).    However, CMS has specifically made COVID testing separately payable in the E.R. and hospital outpatient settings.

How Solid Are Administrator's Rulings?
Generally, CMS policy decisions and fee schedule changes must go through public comment (administrative rule making.)  I've heard it said that the positioning of these pop-up internally generated Administrator's Rulings is a little dubious under the Administrative Procedures Act, depending on the weight and content of the matter involved.